{
  "id": 3503128,
  "title": "Do customer loyalty programs actually work? The benefits are in the eye of the cardholder",
  "url": "https://urgent.news/2026/08/26/do-customer-loyalty-programs-actually-work-the-benefits-are-in-the",
  "topic": "science",
  "section": "Science",
  "published": "2026-08-26T12:20:01.000Z",
  "source": {
    "name": "Phys.org",
    "slug": "phys-org",
    "url": "https://phys.org/news/2026-08-customer-loyalty-benefits-eye-cardholder.html"
  },
  "original_language": "en",
  "account": "The benefits of customer loyalty programs often depend on the individual cardholder's experience. Amid rising cost-of-living pressures, these programs can offer crucial support to families and households. The number of loyalty programs offered by retailers is growing, with the global loyalty management market projected to expand from $17.38 billion in 2026 to $51.65 billion by 2034. However, new research from Edith Cowan University indicates that the effectiveness of these programs in fostering customer loyalty is nuanced.\n\nThe study analyzed survey data from over 800 Australian supermarket customers to understand what influences engagement with loyalty programs and their impact on customer loyalty to retailers. Professor Sanjit Roy from the School of Business and Law at ECU emphasized that customer behavior and retailer loyalty are primarily driven by customers' characteristics and their capacity to engage with loyalty programs.\n\nMany customers lack the time to conduct a mental cost-benefit analysis of loyalty programs. Retailers recognize this and often prompt customers at checkout to scan their loyalty cards, asking, \"Do you want to scan your rewards card?\" Despite earning points for every dollar spent—often requiring 2,000 points for a $10 voucher—customers question whether the benefits outweigh the trade-offs of sharing personal data when discounts and promotions aren't personalized.\n\nThe research found that engaging with loyalty programs leads to retailer engagement and customer loyalty in terms of both attitude and behavior. Customers may delay purchasing items they frequently buy if they anticipate a future discount, even waiting weeks or buying in bulk, but they may miss out if they lack the capacity to wait or their budget is too tight. This temporal price search strategy, along with a spatial price search strategy of looking for deals across multiple retailers, plays a crucial role in customer engagement.\n\nFactors such as trust in retailers, mutual commitment from both parties, perceived benefits, and customers' ability to delay purchases or compare retailers significantly impact engagement with loyalty programs. The absence of these conditions can hinder engagement and create uncertainty in retailers' cash flow projections. The Australian Competition and Consumer Commission has advised supermarkets to be more transparent about their pricing, highlighting the importance of transparency to customers.\n\nTo enhance customer commitment, retailers should personalize loyalty benefits and create a personalized dialogue with customers, building trust through a tailored, integrated strategy that aligns loyalty program values with customer expectations. Clear, transparent, and personalized benefits may strengthen participation and loyalty, demonstrating that engagement with loyalty programs depends on a combination of trust, commitment, perceived benefits, and the ability to wait for discounts or compare retailers.",
  "summary": "Whether you love a loyalty discount at the supermarket or frequently forget your loyalty card, loyalty programs (LPs) can be an essential support for families and households amid growing cost-of-living pressures.",
  "key_points": [
    "Customer loyalty program benefits vary by individual experience",
    "Loyalty programs growing globally, projected market increase",
    "Engagement hinges on trust, commitment, perceived benefits"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}